Arohan Financial Services Limited | Annual Report 2022-23

51 | Annual Report 2022-23 An analysis of the Company’s financial performance for FY 2023, as compared to the previous year, is given below: INCOME STATEMENT ANALYSIS Revenue Break-up of Revenue for FY 2023 5% 10% 85% Interest Income Fee Income Other Income FY 2023 observed a growth in the average AUM during the previous financial year, thus resulting in the Revenue growing by 19% from FY 2022 to FY 2023. Expenditure Interest expenses have increased by 8.7% y-o-y in line with an increase in borrowings. With the employee count increasing from 7,160 in FY 2022 to 8,030 in FY 2023, the employee costs also increased from INR 210 Cr in FY 2022 to INR 246 Cr in FY 2023 showing a 17% increase over the previous year. The administrative costs have increased marginally by 4%, from the previous year mainly due to expansion of branch network. Ratios FY 22-23 FY 21-22 Variance Yield 20.38% 19.65% 3.72% Finance cost 11.62% 10.69% 8.70% Qualifying assets 78.76%* 90.21% (12.69%) Opex 7.25% 6.88% 5.38% CRAR 28.74% 34.58% (16.89%) Leverage 3.39 4.03 (15.88%) *New Norms of Qualifying Asset was effective from April 01, 2022. The Opex ratio has increased primarily due to expansion of branch network. BALANCE SHEET ANALYSIS Loan Portfolio Arohan recorded a 30% growth in the Gross Loan Portfolio from the previous year and crossed the INR 5,357 Cr mark. This was a result of the growth in business in the second half of FY 2023. Net Worth Net Worth INR in Crs FY 22 1,023 4,127 1,338 4,533 FY 23 Debt outstanding Net Worth 5,000 4,000 3,000 2,000 1,000 0 The Outstanding Borrowing and Net Worth have increased by 10% and 31% respectively in FY 2023 over FY 2022 due to the growth in business and CCPS infusion by new investors for INR 248 Cr. MANAGING LIQUIDITY AT AROHAN DURING THE YEAR With the improvement in the macro-environment during FY 2023, the Company also leveraged its capital position. The company raised INR 4,195 Cr in FY23 as compared to INR 3,051 Cr in FY22 across all financial instruments. The Company has raised funds through structured debts to maintain its Cost of Borrowing while not compromising on liquidity. The key underlying principle of fundraising activity is to leverage the company’s financial and operational position to maintain sufficient funds and to lower the cost of borrowings. In this respect, the Company struck a fine balance between carrying high liquidity in the books and reducing the drag of negative carry on such liquid assets, as well as maintaining the qualifying asset ratio under the regulatory threshold of 75% as per the new RBI guideline. Arohan is one of the few NBFC-MFIs in the country, that has maintained its qualifying asset ratio as per the RBI threshold throughout the financial year. Arohan’s Cash and Cash Equivalent as of March 31, 2023, was INR 935 Cr, excluding the undrawn sanctions